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Most of us will make a New Year's resolution this year—whether or not we stick to it is questionable. According to our government's official website, www.FirstGov.gov, saving money is one of the most popular resolutions Americans make. What can you do to make sure you haven't given up on this resolution by the time summer comes around? Make a written plan!
Something mystical happens when we commit something personal to writing. We somehow begin to live out our plans. That's not to say that if you do a written plan you will fall into a trance and automatically carry out the very last detail. Clarifying your goals and aspirations and then facing financial realities, changes the way you see your situation. When you see what must be done, you will begin to move in that direction as a matter of course.
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Are you wondering how to get to this magical place known as "cash flow land"? Here are three specific steps you can follow to develop your written plan and prosper:
Keep your checkbook properly recorded and balanced.
Sounds so simple, doesn't it? Then why do so few people do it? Bank officers tell horror stories of people who bring in checking accounts so far out of balance that the only thing that can be done is close them out and start over with a new account. The math involved in keeping and balancing a checkbook is basic addition and subtraction, and yet most of us have experienced the frustration of an account that won't balance.
- Write out the details.
Figure out how much money you have to work with for the month. Don't try to have the perfect budget for the perfect month because we never have those. Spend every dollar on paper before the month begins. This is called a zero-based budget. Income minus outgo equals zero every month. Look at this month's income and what you'll be putting your money toward, like food, bills, savings and debts, and match them up until you have given every income dollar an outgo name. Download free budgeting forms here.
- Commit to your plan for 90 days. You have tried living your life the other way all this time. Why not give these suggestions a real opportunity to take hold? A one-week trial run and the "I can't do it" line is not a fair or proper analysis. Commit to trying a written plan for 90 days—really commit. If you will stay with it after the first 90 days, however, you will work the kinks out and your life will never be the same. You will have formed a positive, new habit. Ninety days is probably less than 1% of your life; if you give it a try, you will be on your way to financial peace and a life-changing year!
Make your money resolution stick this year. Find a Financial Peace University class near you.